What’s TDR to you?

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Bangalore’s administration and the Karnataka state government are trying to deal with the city’s massive traffic woes in one way or another. The most common approach undertaken by governments is to implement schemes to widen roads, build flyovers, and develop mass transit/rapid transit systems. Recently, the Bruhat Bangalore Mahanagara Palike (BMP) decided to implement its proposal of widening 85 roads in the city. Bangalore’s roads are currently handling 32 lakh vehicles, nearly two and a half times the number in 1990s.

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It was in 2005 that the city’s Roads Department announced the road widening scheme for 85 roads. However, the scheme could not be implemented then because of protests from persons and groups whose properties were coming in the way of the widening. More recently, some citizens groups have protested against the felling of trees as a consequence of road widening. How do you go about widening roads when there are establishments, private properties, trees, and urban clusters in the areas proposed for widening? Can these be demolished for the sake of ease of everyday travel?

Widening as it turns out is messier in implementation than envisaged on paper.

This article is on the application of Transfer of Development Rights (TDR) in road widening schemes. TDR has been used for carrying out development in Mumbai, Chennai and Hyderabad. Bangalore initiated TDR in 2005. However, its implementation is yet to see the light of the day. In this article, we will explain what TDR is and the way it works, and the experiences of other Indian cities with TDR. We will also examine the problems associated with implementing TDR in Bangalore given the way in which the city is configured at present.

BBMP booklet on TDR.

What is TDR?

If your property is in the way of executing a large infrastructure project, the executing agency/the government, can acquire your property by compensating you with TDR. What is actually issued to you is built-up area in addition to what you have originally surrendered. For e.g., if you gave up 600 sq.ft. built-up area to the BMP under the Roads Widening Scheme, then you will receive 900 sq.ft. built-up area, i.e., one and a half times more than what you relinquished. Built-up area is also known as Floor Space Index (FSI) or Floor Area Ratio (FAR). FSI/FAR rates are laid down in the Development Control Regulations (DCR) prepared by the Urban Development Department of the State Government.

Now that you have the additional FSI/FAR, you can either use it on another plot of land/building that you may own in some other part of the city. Or, you can sell the TDR (issued on what is known as the Development Rights Certificate (DRC)) in the market. Many big developers and builders are keen to purchase the DRCs because it legally gives them more FSI. This means that they now have additional built-up area that they can factor into their building plans. Yes, the DRC allows the builder to "legally" add more floors to his building.

However, the owners of the DRCs are usually unaware of how and where to trade these in the market. As a result, they could be shortchanged. In Mumbai, for example, the Collective Research Initiatives Trust (CRIT) a Mumbai based group consisting of architects, practitioners, students and researchers, has developed the FSI calculator for residents who are being approached by builders for redeveloping their buildings.

The FSI calculator enables residents to determine the value that their properties must fetch, the amount of built-up area that can be given to the builder in lieu of redeveloped property and the amount of built-up area that the residents can retain for themselves after giving up some of it. This then becomes a tool by which residents can carry out negotiations with builders. It also prevents the shortchanging that could happen to these residents were they issued TDR certificates.

Why do Municipalities/Governments issue TDR?

Land acquisition in cities is an expensive process. Land is constantly required for developing public amenities such as parks, government schools and hospitals and other infrastructure. When development plans are prepared for the city, private properties are often marked for the development of public infrastructure. The municipality notifies the owners. Sometimes, owners are unwilling to surrender their properties in which case, they either fight legal battles and/or mobilize influence with politicians to get their plots de-notified. Meanwhile, the municipality often does not have the money to directly compensate the owners. Instead it gives them DRCs, which the owners can now use or trade and make up for their losses.

The government issues various types of TDRs. For instance, reservation/amenity TDR is issued in lieu of property surrendered for development of public amenities. Slum TDR is issued in Mumbai when the owner of a property or a developer comes forward to re-house slum dwellers on that property, free of cost. Heritage TDR is awarded when the original property is public heritage. In Mumbai, Cess TDR is given to developers who make improvements on existing dilapidated structures, most of which have been buildings under the Rent Control Act of 1940 and are situated in South Mumbai. In Hyderabad, TDR is offered for developments in the Old City area and for road widening schemes.

Who is eligible?

Property owners and landlords are primarily eligible for TDR. Tenants are least likely to receive compensation. Under the Roads Widening scheme, landlords are responsible for clearing away the tenants before they can come forward to surrender their properties to the BMP. The government is not responsible for other claimants on the property. The TDR scheme is also criticised for this reason.

This means that in the widening of roads around areas such as Hosur Road, a number of street economies could be wiped out and the claimants will have no legal redress. All negotiations have to be carried out in private. TDR thereby absolves the government of any judicial proceedings that it could have been liable for by the tenants. TDR also aids in watering the issue of eviction/relocation to one of privately settled negotiations.

Implementation of TDR in Bangalore and road widening

In Bangalore, the TDR scheme has not had many takers and implementation is a fraught process. As mentioned above, in the inner city areas such as K R Market, there are a number of tenants who become ineligible for any compensation under TDR. These tenants are therefore unwilling to give up their tenancies. Also, given the high property prices in Bangalore, most people are unable to purchase land/houses/establishments in other parts of the city for relocation. One BBMP official pointed out that several citizens are unwilling to give up their ancestral properties owing to years of affiliation with the place.

P Rajan, a lawyer and a researcher with Bangalore based group CASUMM (Collaborative for the Advancement of Urbanism through Mixed Media), has been carrying out extensive research on the Bangalore Metro Rail project and its effects on the city. Rajan points out, "There are many small traders and tenants in the inner city areas that were proposed for road widening in 2005. These people did not want to give up their properties because relinquishing would involve relocation. There is loss of advantages associated with the older location. To relocate is therefore like starting all over again. Those already owning properties in other parts of the city could consider moving, this not withstanding the loss of productive locations. But those who would have to purchase new properties are deterred given the rising property prices in Bangalore."

A BBMP official in the Roads Department concurs with Rajan, "Rising property prices prevents people from giving up their properties. We are offering them TDR, which they can either use on other properties they own, or they can sell the TDR certificates in the market. People can also use the TDR to regularize construction done in excess of what is mandated by the building byelaws."

Given all this, the BMP has currently gone ahead with widening roads that are properties of other government agencies including the army. This allows the BBMP to negotiate with single agencies instead of negotiating with landowners and invariably multiple claimants over the private properties.

Along Hosur Road, institutions such a Baldwins Boys High School and St. Johns Hospital that have open grounds/space have relinquished their properties and availed of TDR. However, places like Johnson Market and mosques around the area have not surrendered space. In any case, these institutions have no open space that can be given up for widening purposes.

The Roads Department intends to widen the roads around areas surrendered. Those that are private properties and have not been given up will remain untouched. Islands may be built around these areas. Widening therefore appears to be more messy than what was envisaged in its original plans. The Roads Department has also issued notification to the remaining 40 roads that have not yet been taken up for widening. No development henceforth can be carried out on these roads.

In Hyderabad too, the government is negotiating with the army and defence agencies to give up land for widening roads and implementing the metro.

Decongestion via congestion?

In Mumbai, TDR issued from a ‘sending place’ can be used in ‘receiving areas’ that are to the north of the ‘sending place’. Consequently, TDR issued in low value areas such as Mankhurd can be utilized in high value areas such as Bandra because Bandra falls to the north of Mankhurd on the map. Many developers have come forward to redevelop slums in Mankhurd owing to the lucrative propositions of carrying our development in areas such as Bandra.

CRIT has found that through the slum TDR gained by redeveloping the slums, the builder earns profits to the tune of 350 per cent. Through massive developments, builders change the land use of the area. The question that then arises is whether urban planning invariably strengthens those who already have an edge in terms of bargaining power?

In Bangalore, the BBMP had earlier decided against implementation of TDR in the central city areas. However, it has now relaxed this criterion in order to attract more people into taking TDR as compensation. Thus, TDR issued around Sarjapur Road can be used (i.e. to add further built-up area) in as lucrative an area as Church Street or M G Road. Areas that are already bursting at their seams owing to the burden on their infrastructure could be further congested with the implementation of TDR.

Transparency and other concerns

Transparency is a lingering matter in TDR because of the number of interests associated with it. Interest groups range from municipal corporations, developers, chief ministers, urban development departments in state government as well as central governments to citizens who seek to profit from TDR in various ways including eviction of tenants and regularizing irregular constructions.

In Mumbai, where TDR is issued for various purposes, the municipal corporation does not keep a record of how much TDR is issued in each category, how much has been used, where it has been used and how much is the remainder. Such lack of record keeping can mean a field day for big developers who may build in excess of the TDR given.

A second issue that has created worries is the use of TDR in legitimizing building bye-law violations. People who have built in excess of the built-up area mandated by the byelaws can now use TDR to regularize the violations. Some protests are being lodged against this aspect of TDR. The biggest criticism levelled against TDR is that in this way, it could lead to more congestion in the city.

In Bangalore, since TDR is relatively new, the BMP must make public details of all DRCs that have been issued so far and keep track of where and how much of the TDR has been utilised. This will help keep a check on abuse of TDR. ⊕

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1 Comment

Hey, Great article on TDR. But I feel, every citizen is responsible towards the development of the country. But, suppose a person having his own private 60×40 house in a busy road, which the govt plans to acquire, how will he be compensated. What will he do with the TDR when his house is left with just 40×40 followed by his foundation being hit. I guess the govt needs to deal with such conditions in a different manner so the owner would also think twice.

BTW, I would want to know more about the TDR policy/norms for new construction. Fire safety norms for tall raise structure as well. If you have any idea/material pls send it forward. Would be a great help.

Thanks….

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